American Resources Policy Network
Promoting the development of American mineral resources.
  • Blog

  • HOMEPAGE >> BLOG >> China’s REE Stranglehold Comes Back Into Focus

China’s REE Stranglehold Comes Back Into Focus

If the first few weeks with a new administration at the helm in Washington, DC are any indication, we will see more efforts to make sweeping changes in federal policy in the coming weeks.  One area where President Donald Trump promised changes on the campaign trail is trade – and specifically relations with China.

In a new piece for Fox News, Executive Vice President, Executive Editor for Fox News, John Moody zeroes in on trade relations with China, and raises the specter of the President and his administration becoming the victim of exactly the job-exporting policies he railed against and face the very real possibility that China could cut off U.S. access to 17 rare materials vital to our advanced aircraft and guided missile systems.”

Followers of ARPN will know that the 17 rare materials in question are the so-called “Rare Earths,” (REEs), which are essential components of 21st Century technology, with applications ranging from personal gadgets to clean energy technology, and national defense, to name but a few.   Says Moody:

“For precisely the reasons Candidate Trump cited for the decline of American manufacturing and the loss of U.S. jobs, China is now in a position to cut off our supply of processed rare earth elements if it feels Trump is pushing too hard on trade and economic issues—or anything else.”

Defense and resource analyst Jeff Green, who is also a member of the American Resources panel of experts, confirms China’s “Trump card,” to which the piece’s title cleverly alludes:

“Absolutely, China could cut off the supply. (…) Processing rare earths is the end of the hose. China controls the spigot the hose is attached to.”

China being the main global producer of REEs, has long held a near-total supply monopoly for REEs, which it has not shied away from exploiting for political gain. For a few short years, a North American mining company sourced REEs domestically, thereby reducing our import reliance for REEs (with the lowest degree of net import reliance pegged at 63% in 2013).  For a number of reasons, however, the company went bankrupt in 2015, bringing our import reliance back up to 100%, with the bulk of our domestic supply still coming from China.

While there is – at least in the short term – no silver bullet to this predicament, the case of REE dependence goes to show that resource policy does not occur in a vacuum, and is intrinsically intertwined with trade, economics and other policy areas. It also underscores the need to finally devise policies that help reduce our mineral resource dependencies by creating a framework allowing for the responsible development of our nation’s vast mineral and metal riches.